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No love lost between newly elected Wynne and PM Harper

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Ontario Premier Kathleen Wynne is back -- with a majority no less -- and there's going to be lots of tension between her government and Stephen Harper's.

The news release from the Prime Minister's Office (PMO) on Thursday night was terse and dry.

You could almost hear the gritting of teeth.

"On June 12, 2014," the PMO started out, "the people of Ontario gave Kathleen Wynne a mandate to continue to serve as their Premier." 

No mention of Wynne winning a majority; she is merely, it seems, permitted to "continue to serve ..."

The Prime Minister went on to say, perfunctorily, that he was looking forward to "working with" the Premier of Canada's most populous province, and then threw in the usual Conservative slogan about -- you guessed it -- "jobs, growth and long-term prosperity."

Lots of friction between Queen's Park and Ottawa

The hard truth is that there are irritants aplenty in the Ontario-Ottawa relationship.

Wynne very publicly complained when the late Finance Minister Jim Flaherty cut equalization to Ontario in his last budget.

That cut came as a result of some modest economic growth in Ontario. It meant that, taken together, equalization and the Canada Health and Social Transfer paid to Ontario dropped over $600 million.

When that has happened to other provinces, during the current difficult economic period, the Harper government has adjusted the total payment to assure there was no sudden loss of revenue.

Then, without warning, in their most recent budget, the federal Conservatives ended that practice -- a policy change that, as it happens, affected only one province: Ontario.

As long as Wynne was a sort of lame duck, and the Harper folks had reasonable expectations that their friend, Conservative Leader Tim Hudak would be taking over soon, the Liberal Premier was in a weak position to fight hard for Ontario's due.

Now, the gloves will be off.

And to those, such as Hudak, who argue that it is shameful that Ontario should even be receiving what he calls "welfare-like" equalization from the federal government, Wynne and company will be able to argue that a good deal of the tax dollars that go into federal-provincial transfers actually come from Ontario taxpayers.

Federal Conservatives fret about Ontario's debt and deficits

On the Harper government's side, current Finance Minister (and Toronto MP) Joe Oliver has publicly fretted about his home province's level of indebtedness and the potentially negative consequences of that supposedly high level of debt on the economy of the country as a whole.

On that front, don't expect Oliver and his Harper government colleagues to be any more deferential to Wynne, now, just because she won a majority.

The Conservatives can reason, after all, that they won a much more convincing majority of seats in Ontario in the last federal election.

Harper and his colleagues are not likely to calculate that the way to similar success next time is to play nice with the provincial Liberals.

Quite the contrary: the Harper government's instincts are always to play hardball and define hard lines of distinction between themselves and their adversaries.

In the near future, Ontario will very likely face a downgrade of its credit rating (from the predatory gnomes of Wall Street. . .?)

If (or when) it happens, we can expect the Harper team to try to take full advantage of that downgrade -- and of the Wynne government's more generalized "irresponsible profligacy" -- as it gears up for the next federal election.

Even if it were possible to prove to Harper and company that making nice with Wynne would be more tactically effective than playing bully-boy, the fact is that they just do not have it in them to do so.

Refugees and immigrants are also a source of conflict

And there are many other points of friction.

When Ottawa unilaterally slashed the federal refugee health program, Ontario picked up some of the slack. The province also continues to provide social assistance to all refugee claimants, something about which Jason Kenney complained bitterly when he was Harper's Immigration Minister.

As well, the federal government has deeply cut funding to Ontario organizations which work in the immigrant integration field.

Indeed, we can expect the entire field of refugees and immigrants to be an ongoing source of bad blood between the Harper and Wynne governments.  

Then there is Wynne's plan to start an Ontario pension plan, to fill in the gaps left by the existing federal pensions: the Canada Pension Plan and Old Age Security (plus, for those most in need, the Guaranteed Income Supplement).

Despite its notional commitment to a balanced federal system, the Conservative government will not find it easy to smile at any expansion, anywhere in Canada, of the basic social safety net.

Ideological opposition to expanded pension system

Flaherty may have had a sneaking sympathy with the idea that the public pension system should be expanded. He is gone now, however, and the neither the current Finance Minister nor any other cabinet heavyweights such as Kenney and Tony Clement have shown any interest in improving the lot of present and future retirees through direct government action.

People should save for their own retirement, the Conservatives reason, and the federal government has provided adequate instruments to encourage that saving.

Those instruments, the Registered Retirement Savings Plan and the recently created Pooled Registered Pension Plans, are also, coincidentally, of great benefit to the financial services industry, where Finance Minister Joe Oliver worked for many years.

And what about the federal electoral consequences?

Most of the chatter in the wake of the Ontario election is not about potential public policy conflicts between Wynne and Harper.

It is about the significance of the June 12 result for the next federal election.

As a rule, provincial elections in Canada portend very little for their federal counterparts.

By the time the next federal election rolls around Wynne will have a few battle scars of her own (and will thus be less of an asset to her federal cousins), and the Harper Conservatives are not likely to be foolish enough to run on a campaign of cutting 100,000 public service jobs -- wedded to a mathematically challenged promise to magically create one million private sector jobs.

The Conservatives, federally, will be the incumbents. And they will run on their notionally pragmatic and prudent stewardship of the economy, not on a set of radical and scary promises.

The federal Liberals will be running under an untested leader, not a sitting Premier and highly experienced and skillful politician. Justin Trudeau's team will also be running on what appears to be a mushy and vague pro-"middle class" policy-book, nothing like Wynnes's vigorous series of far-reaching, and very tangible, progressive proposals.

And as for the federal NDPers -- they will not be burdened with the task of explaining why they could not support a budget that was so obviously progressive it attracted support from many unions and social activists.

Instead, Tom Mulcair's NDPers will be competing with the Liberals (and their untested leader) to show that the current Official Opposition is, in fact, the best alternative to the Harper regime.

In other words, the next federal election will be whole new ball game.

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